As of May 1st, 2022, a gradual process of introducing the use of the PIN for transactions with debit or credit cards for amounts greater than 30,000 colones will begin.
Specifically, as of that date, businesses will be able to ask customers to enter their card’s PIN at the dataphone exclusively in those cases in which both the card used and the dataphone have the functionality to process the PIN. Currently, for transactions greater than 30 thousand colones, customers are required to show their identification document (ID, DIMEX, passport or other) and sign the payment receipt (voucher).
Based on international best practices
The transition towards the use of the PIN instead of the identity document and the signature to validate transactions for amounts greater than 30,000 colones had been agreed upon by the Central Bank of Costa Rica (BCCR) with financial entities for more than three years, and based on international best practices.
The purpose of this measure is to provide greater security for customers to avoid fraud that occurs in the event of the loss or theft of this payment instrument. Therefore, for the implementation of the PIN in card payments, it will be necessary for all businesses to put their dataphones within reach of the customer, as established by the BCCR regulation. In addition, no cardholder is required to hand over their card or PIN when making a payment.
More protection
With this, the client will be able to keep these two elements safely and under his protection. From the health perspective, the 4-digit typing in the dataphone is used to replace the practice of exchanging, with the clerk in the store, the document of identity and bank card to identify the client, as well as exchanging proof of payment (voucher) and signing this document with a pen used by countless other clients.
After a period of study and consultation, the BCCR and the main financial entities agreed at the end of 2021, in a situation in which the infection rate due to the pandemic was very low, to start this process on February 1st, 2022.
Given the increase in infections by Covid-19 in recent days, as a result of the Ómicron variant, and to give financial institutions more time to explain the change to their clients and affiliated businesses, this group of entities decided to start the process of transition starting next May 1st.
The introduction of the PIN as validation for transactions for larger amounts will only initially affect a very small percentage of people and transactions. In first place, currently transactions greater than 30 thousand colones represent only 10% of all card payment transactions. In addition, the change will only affect people who have cards with the functionality of processing the PIN.
The cards will be replaced by the financial entities, gradually, upon expiration or in the event that the client requests their replacement. In order to speed up the replacement of cards and to protect their cardholders, some issuing financial institutions began this process several months ago, so that some customers already have debit or credit cards with the functionality of requesting the PIN at the point of sale (dataphone).
As of July 1st, 2022, every new card that is issued will have the ability to request the PIN for purchases in stores. Finally, the implementation of the PIN requires preparing the entire infrastructure of the payment card system. About this Lastly, Carlos Melegatti, director of the Payment System Division of the BCCR, explained: “100% of the dataphones located in stores must be updated so that the customer enters his password when making a purchase; it was agreed that this obligation must be fulfilled between May 1st, 2022 and February 1st, 2023.”
International standard
The digitization of the PIN in the dataphones responds to a good international practice, which will gradually be imposed in all the countries of the world. Thus, this practice was regulated in all the countries of the European Community since 2017. In addition, international experts recommend its use over the handwritten signature on the voucher.
Visa expressed its favorable opinion before the Australian Competition and Consumer Commission and made its implementation mandatory in New Zealand in 2014. For its part, Mastercard has already issued a technical standard that requires its implementation in Latin America and the Caribbean from from June 1st, 2022 and until January 1st, 2024 (maximum date).
Gradually, its use will be extended to more and more countries. On the other hand, this measure is an additional step to the work that the BCCR has been carrying out in the last six years, together with the financial sector and international brands, to make more efficient and secure card payment ecosystem. This process began with the replacement of the magnetic stripe by the EMV-Chip.
Later, the entire inventory of cards and dataphones was replaced to incorporate contactless payment. Other measures in the same direction include the implementation of fast payment for transactions of small amounts, without requiring them to sign the voucher, the implementation of automatic notification schemes for all transactions carried out at the point of sale and the obligation for businesses to place the dataphone facing the customer and within reach of their hand.
The BCCR is coordinating with financial entities so that when they issue a card with the PIN request functionality, they inform their client of this condition and provide them with the respective personal identification number (PIN).
Customize at the client´s convenience
The client will then be able to customize it at his convenience through the channels provided by the entities. The service of delivery or change of the PIN must be provided to customers free of charge, by the issuing entities, in at least the Internet banking channels (banking website), mobile banking and own ATMs, in accordance with regulations by BCCR.
